Case Study: McDonald's Corporation - Designing an Incentive System

1. INTRODUCTION Designing a compensation plan is champion of the most manifold tasks for most organizations as it affects job satisfaction, employee turnover, productivity and the overall social club legalness. If not properly managed, this whitethorn lead to high employee turnover, subaltern productivity, among other problems which is especially honest for a large service-oriented staunch like McDonalds. McDonalds first-line managers deal this instant with customers along with the front-line crew and it is polar to draw up an effective compensation plan that leave alone keep them displace to work hard. McDonalds has to consider various factors in order to c one timeption an optimal compensation plan for the first-line managers. Unless other specified, managers provide be taken to mean first-line managers in this report. 2. FACTORS TO librate IN conception A COMPENSATION PLAN 2.1 Financial and Non-Financial Incentives Compensations foot be based on financial and non -financial incentives. Financial incentives let in salary and bonus while non-financial incentives include benefits and perquisites such as the use of company cars and club memberships. Financial incentives can motivate managers by cheering their holds but only to a authoritative extent. According to Maslows hierarchy of removes , erstwhile a sire level of needs has been satisfied, it give no longer give out as a motivating factor for the managers. As such, hearty their higher level of needs is required.

Therefore, in the context of McDonalds, once the managers are satisfied with their basic needs (pay), the moneta ry incentives will no longer motivate them. ! There is a need to provide managers with non-financial incentives such as promotion, increased autonomy and actualization so as to fulfill their esteem needs. Thus, it is necessary for McDonalds to regard the needs of the first-line managers and incorporate suitable financial and non-financial incentives into the compensation package. 2.2 reinforcement System Generally, there are two types of... If you want to dismay a full essay, order it on our website: OrderCustomPaper.com

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